Downsizing, dumbsizing, rightsizing, wrongsizing: no matter what term is used, the reality is that many American companies have been and will be laying off workers in an attempt to boost profits.
"But, now that many large American companies have tried it, we see that there are costs to downsizing that were not, at first, anticipated," says Regina Conti, assistant professor of psychology at Colgate University in Hamilton, NY. She co-authored a chapter, "The Impact of Downsizing on Organizational Creativity and Innovation," for the book, "Social Creativity, Vol. 2 (Hampton Press, 1998) with Teresa M. Amabile, professor of business administration at Harvard Business School.
One particularly important but often neglected problem that downsizing companies face is the lessened potential that the organization may have for producing highly innovative and creative work, says Conti.
"The changes that occur during downsizing can alter the work environment in such a way that developing creative solutions to problems and following through with new and innovative ideas is much less likely," says Conti. "This may be precisely the reason that downsizings have, more often than not, failed in improving the financial status of organizations."
Conti notes that on top of the scarcity of material resources faced by the struggling organization, the newly downsized company is now lacking in human resources as well; more work must be done by fewer people. Employees in a recently downsized organization may find themselves working in a new location with new people, or even doing a completely different kind of work. After losing valued co-workers, worrying about their job security and coping with a difficult transition, they are left feeling less connected to the organization and its goals.
The need to cope with these three types of change simultaneously, makes effective, cost-saving downsizing a challenging prospect," says Conti.
Editors: Conti is at 315-824-7661 (office). Her e-mail address is [email protected] Please contact Steve Infanti of Dick Jones Communications at 814-867-1963 if you would like a copy of the book chapter.
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